What Does a Purchasing Agent Do?

Purse hanger is a new type of material purchasing mode. Its cheap, efficient and fast features will be continuously recognized by more enterprises, and it will become a new choice for many enterprises to reduce procurement costs.

Purchasing agent

Compared with the current material procurement model of most Chinese enterprises, the sourcing agent is a new type of material procurement model. The biggest difference between it and the traditional material model is that the procurement agent strives to differentiate the function of material procurement from the inside of the enterprise and realize the externalization of material procurement.

In other words, under the material procurement agency model, most enterprises will no longer need to set up a special material procurement department and have a large number of reserves.

To survive and develop, this new type of material procurement model for purchasing agents must meet three conditions:

The first is the low price, that is, the price of the materials it provides is lower than the customer's own purchase, which is the premise that a purchasing agent can exist.

The second is high quality, that is, the quality of the materials provided must meet the requirements of customers, which is the key to the existence of purchasing agents.

The third is integrity, which means that customers can be confident that the materials they need can be accurately and timely delivered to the designated location, which is the basis for the existence of purchasing agents. Purchasing agents are cheap, efficient and fast. This requires that the procurement agency must have a high sense of social responsibility, a highly professional material distribution team and a highly professional

The traditional material procurement mode refers to the establishment of a procurement department within the enterprise to purchase the production materials required by the enterprise. It is currently the most common material procurement mode in China. Although this model has advantages in protecting the trade secrets of the company's raw material supply and does not have to worry about integrity issues, the cost is too high.

The key to the ultimate survival of a purchasing agent is whether the purchasing agent company can purchase cheap and good materials for customers. Therefore, low-cost operation is a general strategy implemented by procurement agency companies. In fact, purchasing agency companies do have such advantages and capabilities.

There is room for cost squeeze

According to relevant data, in China's traditional material procurement model, procurement costs account for 60% to 65% of the total investment cost of enterprises, while in foreign countries, this proportion is less than 40%. In other words, there is still at least 20% of compression space in China's material procurement costs. To improve economic efficiency, the reduction of material procurement costs is a very realistic choice.

Achieve savings in purchasing costs

Purchasing agent companies specialize in the procurement and distribution of materials. It separates the function of material procurement from production enterprises and realizes the division of labor in society. According to the theory of division of labor and specialization, division of labor contributes to the development of specialization, and the direct impact of specialization is cost savings. The agent procurement enterprise is a specialized material procurement enterprise. It has a professional procurement and material distribution team, which can effectively reduce procurement costs. First, it specializes in the procurement of one or more types of materials and can provide services to multiple customers at the same time. Therefore, it is usually a bulk purchase in operation. Bulk purchases often have greater discounts on prices and can enjoy more than ordinary customers. Discount for concessions. Secondly, the agent purchasing enterprise only deals in the procurement of one or more types of materials. It has richer information than ordinary companies, is familiar with market conditions in this field, and can quickly complete procurement tasks when customers issue purchasing instructions, which can save a lot Transaction costs such as inspections and negotiations. For customers, in addition to saving the daily expenses of the purchasing department, the salaries of procurement personnel, the cost of inventory of materials and the transaction costs of procurement, they can also purchase the required materials with higher efficiency and lower prices. The entire procurement process of enterprises tends to be simplified and streamlined, and procurement costs are greatly reduced.

Guarantee the quality of materials

Purchasing agency enterprises can survive and develop also because it is subject to an intangible constraint, that is, its responsibility to customers. Customers trust it and are willing to entrust their material procurement business to it, so that it can survive and grow. Therefore, it must stand on the customer's stand, think what the customer wants, and anxious what the customer wants. It must be sober at all times, because in a society with a high level of information circulation, a single negligence or fraud (such as a good charge) will not only make you lose a customer forever, but may also bring you a devastating disaster. In this sense, purchasing agency companies have a greater sense of responsibility and crisis than the customer's own purchasing department, and are more motivated to seek quality and cheap materials. In addition, purchasing agency companies specialize in the procurement of certain types of materials, have more professional procurement staff, have a more accurate grasp of market conditions, and have a better ability to identify the quality of related materials. Therefore, the purchasing agent is able to purchase materials that meet customer requirements. This more specialized ability for one or more types of materials is an indispensable means for the survival and development of the procurement agency; and for the customer, it virtually saves procurement costs. .

Provide fast service

The procurement agency has a professional material distribution team, which has the ability to accurately deliver the materials required by the customer to the customer's designated location within a short period of time. Moreover, for a long time engaged in the distribution of a certain type of materials or several types of materials, the performance and transportation requirements of the materials are better understood, thereby reducing the loss of materials during loading and unloading and transportation, and saving costs. For the client enterprise, as long as the purchase order is issued in a reasonable time according to the production schedule, the required materials can be supplied in time, so there is no need to reserve a large amount of materials, only a small amount of inventory or zero inventory is required to prevent the backlog of raw materials and materials, thereby Reduce inventory costs.

Preventing corruption in procurement

In the traditional material procurement mode, in order to determine the supplier, the procurement staff often needs to conduct field inspections of the supplier, and this is usually a link that is prone to corruption in the procurement process. In reality, some suppliers, in order to obtain qualifications for material supply, hesitate to spend a lot of money to attract procurement personnel, and perhaps promise to give rebates implicitly. But wool comes out of sheep, and as a result of the small profits of purchasers, companies pay higher costs. In order to prevent the occurrence of fraud in the procurement process, enterprises have established a series of monitoring mechanisms, but from the actual implementation results, companies not only spend high costs for this, but the effect is not obvious. The procurement agency model separates the function of material procurement from the inside of the enterprise, and the relationship between the procurement agency and customers is made public and clear. For client companies, the procurement of materials has been reduced, thereby reducing the possibility of corruption at the source and greatly reducing the cost of supervision in the procurement of materials.

Purchasing agent, as a new type of material purchasing mode, will be continuously recognized by more enterprises due to its cheap, efficient and fast features, and it will become a new choice for many enterprises to reduce procurement costs.